Suppose your MasterCard calculates interest using the average daily balance method, and the monthly interest rate is 1.6 %. The itemized billing for the month of August is shown below. Detail Unpaid balance Charge Charge Charge Payment received Last day of billing period Payment due date Date August 1 August 9 August 10 August 18 August 25 August 31 September 7 (a) Find the average daily balance. $ (b) Find the interest due for this month. $ Amount 1085 125 1130 140 995 (c) Find the total balance owed on the last day of the billing period. S
Suppose your MasterCard calculates interest using the average daily balance method, and the monthly interest rate is 1.6 %. The itemized billing for the month of August is shown below. Detail Unpaid balance Charge Charge Charge Payment received Last day of billing period Payment due date Date August 1 August 9 August 10 August 18 August 25 August 31 September 7 (a) Find the average daily balance. $ (b) Find the interest due for this month. $ Amount 1085 125 1130 140 995 (c) Find the total balance owed on the last day of the billing period. S
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
Related questions
Question
Transcribed Image Text:Suppose your MasterCard calculates interest using the average daily balance method, and the monthly
interest rate is 1.6%. The itemized billing for the month of August is shown below.
Detail
Unpaid balance
Charge
Charge
Charge
Payment received
Last day of billing period
Payment due date
Date
August 1
August 9
August 10
August 18
August 25
August 31
September 7
(a) Find the average daily balance. $
(b) Find the interest due for this month. $
Amount
1085
125
1130
140
995
(c) Find the total balance owed on the last day of the billing period. $
(d) This credit card requires a $15 minimum payment or 1/24 of the amount due, whichever is higher. What
is the minimum monthly payment due for this month? $
Expert Solution
Step 1
"Since you have posted a question with multiple sub-parts, we will provide the solution only to the first three sub-parts as per our Q&A guidelines. Please repost the remaining sub-parts separately."
The average daily balance on the credit card depicts the total amount of balance at the day's end divided by the number of days in the cycle of billing.
The interest due on the card is computed by multiplying the interest rate by the average daily balance for the specified period.
The total of average daily balance and the interest due each month is the total amount owed.
Trending now
This is a popular solution!
Step by step
Solved in 4 steps with 2 images
Recommended textbooks for you
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
Foundations Of Finance
Finance
ISBN:
9780134897264
Author:
KEOWN, Arthur J., Martin, John D., PETTY, J. William
Publisher:
Pearson,
Fundamentals of Financial Management (MindTap Cou…
Finance
ISBN:
9781337395250
Author:
Eugene F. Brigham, Joel F. Houston
Publisher:
Cengage Learning
Corporate Finance (The Mcgraw-hill/Irwin Series i…
Finance
ISBN:
9780077861759
Author:
Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor
Publisher:
McGraw-Hill Education